TEHRAN, July 24 (Shana) &#45;&#45; West Karoun covers a quite large area of land in the western bank of Karoun River as far away as the Iran-Iraq border. West Karoun is part of oil-rich Khuzestan Province, but in the 1980s and the following two decades it was impossible to operate oil exploration and production projects due to the imposed war and landmines that had not been cleared.​

This area contains
significant oil deposits, including the heavy crude oil in Band-e-Karkheh
field.

Most oil fields in the
West Karoun area are shared with neighboring Iraq. But Band-e-Karkheh is an
independent one. Several years ago, National Iranian Oil Company (NIOC) devised
strategic plans to invest more than $20 billion in the West Karoun fields in a
bid to recover 1 mb/d of crude oil from them.

Band-e-Karkheh was among
projects introduced to foreign firms for development under the new format of
oil contracts, known as the Iran Petroleum Contract (IPC).

Band-e-Karkheh is located
20 kilometers northwest of Ahvaz, the provincial capital of Khuzestan. The
field is 50 kilometers long and 5 kilometers wide, and is estimated to hold
more than 4.5 billion barrels of crude oil in place with an API gravity of 24
in Sarvak and Ilam formations.

Band-e-Karkheh is
administered by Arvandan Oil and Gas Production Company, but its development
has been assigned to Petroleum Engineering and Development Company (PEDEC).

Band-e-Karkheh is
forecast to have a production capacity of 7,500 b/d of crude oil. It has an
anticline structure, one-sixth of which is extended to the northeastern
boundary of Mehr Block.

Oil exploration
operations in Band-e-Karkheh date back to the 1960s when 2D seismic testing and
drilling of first well (BKH1) were conducted with the objective of identifying
the hydrocarbon potential of Asmari formation. BKH1 was assessed as empty and
exploration operations were halted. In 2007, another well (BKH4) was drilled in
the northern part of the field to appraise Ilam formation. It was proven that
at least 1,000 b/d of oil could be extracted. Sarvak Formation in
Band-e-Karkheh is also estimated to hold 2.5 billion barrels of oil in place.

In 2012, an agreement for
the development of Band-e-Karkheh was signed between PEDEC and the Armed Forces
Social Security Organization Investment Company. But two years later the
agreement was declared null and void.

The manager of
development of this field recently announced that Austria's OMV had started
work in Band-e-Karkheh, saying the field would be soon put out to tender under
an IPC deal. Ali-Reza Zamani said OMV had already declared Band-e-Karkheh
commercial.

"These operations
were carried out within the framework of an exploration and development
agreement between NIOC and OMV of Austria," he said.

OMV left Iran as
international sanctions were tightened against the Islamic Republic. As a
result, all development activities that it had to carry out on Band-e-Karkheh
were halted. After OMV pulled out of Iran, PEDEC and the Armed Forces Social
Security Organization Investment Company signed an agreement for the early
production of 7,500 b/d of oil from Band-e-Karkheh, which would reach 20,000
b/d in Phase 1.

Now OMV has signed an MOU
with NIOC to study Band-e-Karkheh and is seriously following up on relevant negotiations.
Technical working group committees are to soon start work. According to 2D
seismic data, Ilam and Sarvak formations are the target reservoirs in
Band-e-Karkheh which has three humps.

Two appraisal-extension
wells are to be drilled in the central and northern humping of the field to
gather data about the second phase development of Band-e-Karkheh in parallel
with drilling development fields in the southern humping. It is likely to
enhance early production from Band-e-Karkheh by more than 7,500 b/d; however,
this issue will be made clear after seismic data is processed and interpreted.
2D seismic data has estimated that Ilam formation contains 2.2 billion barrels
of oil in place. But 3D seismic test shows that the amount of oil in Ilam
formation is much higher. Add to this significant oil deposits in Sarvak
formation.

OMV plans to transfer oil
from Band-e-Karkheh to West Karoun pumping station by using multiphase pumps.
In case the adjacent production units are at their full capacity mobile
processing installations will be used.

Courtesy of Iran Petroleum

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This area contains
significant oil deposits, including the heavy crude oil in Band-e-Karkheh
field.

Most oil fields in the
West Karoun area are shared with neighboring Iraq. But Band-e-Karkheh is an
independent one. Several years ago, National Iranian Oil Company (NIOC) devised
strategic plans to invest more than $20 billion in the West Karoun fields in a
bid to recover 1 mb/d of crude oil from them.

Band-e-Karkheh was among
projects introduced to foreign firms for development under the new format of
oil contracts, known as the Iran Petroleum Contract (IPC).

Band-e-Karkheh is located
20 kilometers northwest of Ahvaz, the provincial capital of Khuzestan. The
field is 50 kilometers long and 5 kilometers wide, and is estimated to hold
more than 4.5 billion barrels of crude oil in place with an API gravity of 24
in Sarvak and Ilam formations.

Band-e-Karkheh is
administered by Arvandan Oil and Gas Production Company, but its development
has been assigned to Petroleum Engineering and Development Company (PEDEC).

Band-e-Karkheh is
forecast to have a production capacity of 7,500 b/d of crude oil. It has an
anticline structure, one-sixth of which is extended to the northeastern
boundary of Mehr Block.

Oil exploration
operations in Band-e-Karkheh date back to the 1960s when 2D seismic testing and
drilling of first well (BKH1) were conducted with the objective of identifying
the hydrocarbon potential of Asmari formation. BKH1 was assessed as empty and
exploration operations were halted. In 2007, another well (BKH4) was drilled in
the northern part of the field to appraise Ilam formation. It was proven that
at least 1,000 b/d of oil could be extracted. Sarvak Formation in
Band-e-Karkheh is also estimated to hold 2.5 billion barrels of oil in place.

In 2012, an agreement for
the development of Band-e-Karkheh was signed between PEDEC and the Armed Forces
Social Security Organization Investment Company. But two years later the
agreement was declared null and void.

The manager of
development of this field recently announced that Austria's OMV had started
work in Band-e-Karkheh, saying the field would be soon put out to tender under
an IPC deal. Ali-Reza Zamani said OMV had already declared Band-e-Karkheh
commercial.

"These operations
were carried out within the framework of an exploration and development
agreement between NIOC and OMV of Austria," he said.

OMV left Iran as
international sanctions were tightened against the Islamic Republic. As a
result, all development activities that it had to carry out on Band-e-Karkheh
were halted. After OMV pulled out of Iran, PEDEC and the Armed Forces Social
Security Organization Investment Company signed an agreement for the early
production of 7,500 b/d of oil from Band-e-Karkheh, which would reach 20,000
b/d in Phase 1.

Now OMV has signed an MOU
with NIOC to study Band-e-Karkheh and is seriously following up on relevant negotiations.
Technical working group committees are to soon start work. According to 2D
seismic data, Ilam and Sarvak formations are the target reservoirs in
Band-e-Karkheh which has three humps.

Two appraisal-extension
wells are to be drilled in the central and northern humping of the field to
gather data about the second phase development of Band-e-Karkheh in parallel
with drilling development fields in the southern humping. It is likely to
enhance early production from Band-e-Karkheh by more than 7,500 b/d; however,
this issue will be made clear after seismic data is processed and interpreted.
2D seismic data has estimated that Ilam formation contains 2.2 billion barrels
of oil in place. But 3D seismic test shows that the amount of oil in Ilam
formation is much higher. Add to this significant oil deposits in Sarvak
formation.

OMV plans to transfer oil
from Band-e-Karkheh to West Karoun pumping station by using multiphase pumps.
In case the adjacent production units are at their full capacity mobile
processing installations will be used.